Paras Defence reported a revenue of Rs 1,082 million, reflecting a year-over-year increase of 35.8%, largely due to enhanced project execution during the quarter. The Optics and Optronic Systems segment accounted for 51% of the revenue, while the Defence Engineering segment contributed 49%. The revenue from the Optics segment surged by 374% year-over-year, whereas the Defence Engineering revenue saw a decline of 22%. The absolute EBITDA rose by 131% compared to the previous year, aided by reduced input costs. The EBITDA margin reached 26%, marking an increase of 1077 basis points from Q4 FY24. Furthermore, the adjusted profit after tax grew by 98% year-over-year, bolstered by higher other income and a lower-than-average tax burden.
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Nirmal Bang Report
The projected compound annual growth rate (CAGR) for Paras Defence and Space Technologies Ltd.’s revenue, EBITDA, and PAT during FY25-FY27E is estimated at 26%, 26%, and 25%, respectively. Following our preview results published on April 13, the stock has experienced a 40% rally. We have adjusted the valuation multiple from 72x to 62x to align it with the three-year average.
The stock is currently trading at a one-year forward price-to-earnings ratio of 55.6x, which is below the three-year average P/E of 62x. We are revising our recommendation to Hold and valuing Paras Defence at 62 times the estimated EPS for March 2027, consistent with the three-year average P/E, resulting in a target price of Rs 1,517, which suggests an upside potential of 11.6%.
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